Bank of America announced this week that it has begun refinancing mortgages at up to 105% of home values under the Fannie/Freddie Home Affordable program, part of the Administration's foreclosure relief plan. There are two main components to Home Affordable, the refinancing of existing mortgages that are not behind and modification of mortgages that are. Refinancing doesn't really solve the excess debt problem, but it does slow down the foreclosure machine a bit.
BofA also announced that it will begin offering the new and improved mortgage modifications consistent with Home Affordable guidelines in the next two weeks, and is extending its moratorium on foreclosures until April 30. The press release mentions that homeowners needing modifications will first be placed on "trial modifications", i.e. short-term payment agreements that must be converted to permanent modifications after 3 to 6 months. Treasury's guidelines for modifications released in March contemplated that servicers could begin offering compliant modifications on a trial basis, pending full development of the program. The contracts between Treasury and servicers for incentive payments and data reporting on mortgage modification and foreclosures have not been rolled out yet, but are due out by the end of April.
UPDATE: I am told that few if any employees at BofA's servicing operation know about Home Affordable modifications (designed to reduce borrower's mortgage payment to 31% of income.) With persistence, however, it is possible to find someone who has heard of the new program. Homeowner advocates should try calling 1-877-776-5842, and wait for the message.
Meanwhile according to a report on BankruptcyProfBlog the Bankruptcy legislation to permit modification of mortgages to actually reduce debt to align with property values appears to be dying a slow death in the Senate.
I have been trying to get approved for the home affordable plan since. Bank Of America has been giving me the run around. Every time I call if a diffrent answer or a different program they want to put me in. Now that im 3 mos behind they say they are working on my case and that Its in the workout stage. It is now Aug, I get all kinds of excuses. Bank Of America says they are waiting on investors,Fannie me and now they are say the Government. I was told it take 10days,ten days turned into 30days,30days turns into 60days.Now they are telling me it takes 60 to 120 business days. Does this plan really exists? I feel we have no one to help us fight. Bank Of America has all the control while I sit and slowly loose my house. When I started back in April I was current on my payments. Bank America really misleads you. They tell not to pay the mortage, they give you misleading information. At this rate alot of home owners will have no home. Bank America needs to be honest and help people that are facing hardship at this time.
Posted by: michelle | Monday, August 17, 2009 at 10:42 PM